The property tax amount listed on a real estate listing may not be accurate, especially for a new unit that hasn’t received an individual assessment.
In Ontario, condo owners typically receive an individual property-tax bill from their municipality, separate from condo fees that cover common expenses.
We analyzed Ontario’s property-tax guide, the MPAC’s condominium-assessment guide, MPAC’s reconsideration process, and CMHC’s Condominium Buyer’s Guide. We drew on Ontario’s and MPAC’s guides to help us explain property taxes, condominium assessments, and the assessment and reconsideration process, and we drew on CMHC’s guide to identify the condo-taxation documents a condo buyer should review.
Do You Pay Property Tax On Condos?
Yes, condo owners generally pay property tax on their units. Condo property taxes are annual fees paid to the municipal government to maintain the local community and its surroundings. They are required, and condo owners pay them directly to the local government.
Note that condo property tax differs from condo fees, which cover the maintenance and operation of the building itself.
In addition, rent-to-own tenants aren’t subject to condo property tax, as developers or sellers are responsible for this payment until the buying party completes all terms. It’s essential to review the terms of a rent-to-own agreement in case of specific clauses addressing property tax.
How Is Condo Property Tax Calculated?
Property taxes in Ontario include an education and a municipal portion. In areas with a two-tier municipal system, the municipal portion can include both lower-tier and upper-tier rates. Property tax = assessed value of your unit × applicable tax rates for the unit’s property class.
Condo Property Tax Formula
Say that you own a condo in Ontario and it’s assessed at $500,000. If you use the appropriate tax rate for your condo’s property class and the relevant year, say 1%, the simple estimate is $500,000 x 0.01 = $5,000 for the year.
Assessed value is not the listing or the price you bought your condo for, and is also not the total value of the whole building. In Ontario, each registered condo unit has its own assessment roll number and assessed value.
What Affects The Assessed Value Of An Ontario Condo?
Property assessment is separate from a municipality’s decision to raise the property tax rate. In general, MPAC assesses condominiums by looking at comparable condo sales in an area. MPAC identifies four leading condo factors: the age of the building, total living area, location and construction quality.
Read More: Compare a Home Appraisal With a Property-Tax Assessment
What To Verify Before You Buy
| Document or answer | What to check | Why it matters |
|---|---|---|
| Latest final tax bill | The address of the property, roll number, year, class, assessed value, total levies, instalments, arrears and credits. | Shows the actual municipal charge for this unit, not a city-wide percentage estimate. |
| Property Assessment Notice or Change Notice | Assessed value, effective date, property details, and the deadline for reconsideration. | The tax bill may change after MPAC updates the assessment record. |
| New-condo status | Whether the declaration is registered and the unit has an individual roll number. | Amounts collected at closing may not reflect a complete individual assessment. |
| Municipal tax-account statement | Paid balance, arrears and pending supplementary or omitted bills. | An adjustment in process may not show on the seller’s last bill. |
If you’re buying an existing condo, CMHC recommends getting a copy of the latest property assessment and property tax bill. Don’t rely on listing estimates or condo corporation documents.
If you’re buying a new condo, get a property tax estimate from the municipality, and have your lawyer explain what the purchase agreement says about paying property taxes and any adjustments that will be made once they’re assessed. Budget for property taxes before the bill arrives; do not assume the builder’s estimate will be the final figure.
Read More: Review Ontario Condo Fees Before You Buy
How To Check Or Challenge The Assessment
- Go to AboutMyProperty to compare the information that MPAC has with your actual condo, such as size, parking or locker information where shown, age, and renovation data. Use comparable evidence, not only your purchase price.
- If you are not satisfied with your assessment, you can make a free Request for Reconsideration by the deadline printed on the assessment notice. Bring documentation that supports your case, such as comparable sales or assessments, photos, an appraisal, or documents that correct the unit data.
- Residential owners must complete a Request for Reconsideration before they can appeal their assessment to the Assessment Review Board. Appeals must be made within the deadline (90 days), which is indicated in the letter from MPAC with the outcome of the reconsideration.
Tax bills are separate from the MPAC appeal process. Unless the municipality confirms another arrangement, continue paying taxes as indicated on your tax bill. If your assessment is changed, the municipality can adjust your tax account.